Purpose – Failure to identify any significant relationships between principal leadership and student achievement has proved concerns about the assumed value and legitimacy of principal leadership. The purpose of this paper is to contribute to the current literature by empirically testing the relationships between the principal leadership and the teacher self‐efficacy, a construct which has a proven impact on student achievement. The role of collective efficacy on the relationship between transformational leadership of principals and self‐efficacy of teachers was a special focus for the study.Design/methodology/approach – A causal comparative research design was employed to study the direct, indirect, and mediating relationships among principal leadership, teacher self‐efficacy, and collective efficacy in schools. The participants included a cluster‐random sample of 813 primary school teachers. Data gathering instruments composed of a combination of the Multifactor Leadership Questionnaire, the Collective ...